We recently moved from using Exchange 5.5 and Exchange 2003 using the ADC. We had staff logging on using an admin account but with the Exchange 5.5 Administrator application, she only had access to mailboxes, external contacts and DLs. We want to give her rights to create/delete/modifycontacts and DLs without access to domain users. Is this possible? Is there a 3rd party app to allow me to do this?

In 2003 you can assign a user as the owner of a DL and they can modify that DL from thier Address Book in the Outlook client. They can't create new DL's or remove old DL's, but they can add/delete/modify the members of the DL if they are the owner. They don't need admin rights to the domain at all.